India: HDFC Bank, Reliance Industries, Cyient Ltd, Hcl Technologies, Zhenro Properties, Nestle India and more

• HDFCB’s stock has seen significant volatility over the past one month. The Street seems to have four major concerns, which we think are either unfounded or too myopic.
• A recent concern has been around the compression in NIMs, where the Street is missing the point that this is well offset by lower operating/credit costs per the shifting product-mix.
• HDFC Bank has been gaining market share and with its distribution expansion, the growth is only going to accelerate further. Overall, the current valuations offer an attractive entry point. 

• Broad global MSCI equity indexes (ACWI, ACWI ex-US, EAFE, and EM) remain bearish, as do indexes in Japan, Hong Kong, China, Europe, and Germany.
• Until we see these indexes break above downtrends and key resistance levels, we cannot be bullish.
• Remain overweight Energy and Materials with the secular commodity bull market intact. Defensive Sectors are also hitting 1-2-year RS highs; we recommend overweights to Health Care, Utilities, and Consumer Staples.

• Cyient reported robust Q4FY22 results with revenue for the quarter at Rs 1,181 Cr, declined by 0.2 % QoQ and improved by 8.1% YoY. Operating Margins improved by 60bps QoQ to 14.5%.
• Services operating margins de-grew by 20bps QoQ to 15.4% while the DLM margins stood at 9.8% the quarter before being aided by strong execution
• We recommend a BUY on the stock and assign a 17x P/E multiple to the company’s FY24E earnings of Rs 60.0/share to arrive at A TP of Rs 1,000/share, implying an upside of 20% from CMP.

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• HCL Technologies Ltd (HCL Tech) Q4FY22 performance stood in line with our expectations.
• The company reported revenues of Rs 22,597 Cr, up 1.1% QoQ and 15.1% YoY.
• We recommend a BUY rating on the stock and assign a 20x P/E multiple to its FY24E earnings of Rs 67.4/share to arrive at a TP of Rs 1,345/share, indicating an upside of 22% from the CMP.

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Lucror Analytics Weekly Wraps provide an overview of all Morning Views comments and reports published by our analyst team in the past week, and also showcase a list of the most-read reports.

In this Insight:

1. China Jinmao Holdings
2. Guangzhou R&F Properties
3. Sunac China Holdings
4. Greenland Hong Kong Holdings
5. Evergrande

and more…

• Nestle India (NEST) revenue reported in Q1CY22beat our estimates. However, the company’s EBITDA and PAT were a miss with clear signs of pressures noted on Gross Margins owing to inflationary RM in edible oil, milk & derivatives, and packing materials.
• Reported revenue grew 9.7% YoYto Rs 3,951Cr (~4% above our estimate of Rs 3,800Cr in Q1CY22)
• We maintain HOLD with revised TP of Rs 18,300 (60x Mar-24E) vs earlier TP of Rs 18,600 (60x CY23E).

Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.